15.7.2 Implicit adjustments

Investment firms should use instruments for variable remuneration where the price reacts to changes of the investment firm’s performance or risk. The evolution of the stock price or the price of other instruments should not be considered as a substitute for explicit ex post risk adjustments.

Where instruments were awarded and staff, after deferral and retention periods, sell these instruments or the instrument is paid out in cash at its final maturity, staff should be able to receive the amount due. The amount can be higher than the initially awarded amount where the market price or the instrument’s fair value has increased.